Shares of Acadia Pharmaceuticals (NASDAQ:ACAD) fell by as much as 12.58% in pre-market trading today on light volume. What's driving this double-digit downturn?
Acadia reported disappointing second-quarter earnings after the bell yesterday. The company modestly missed consensus estimates for both its bottom- and top-line for the three-month period.
The bigger issue, however, is that Acadia also lowered its 2018 sales guidance for its Parkinson's disease psychosis drug Nuplazid by a healthy margin. Specifically, the company stated that Nuplazid's net sales are now expected to come in at between $210 million and $225 million for the full year. Previously, Acadia had the drug's annual sales ranging from $255 million to $270 million.
During the accompanying conference call, Acadia's CEO Stephen Davis laid the blame for the lowered guidance on "reduced patient starts" during the second quarter resulting from a pair CNN articles questioning Nuplazid's risk-to-reward ratio. In brief, these CNN reports highlighted the fact that numerous patients continue to experience hallucinations while taking Nuplazid and a worrying number of patients have also died. These real world data also seem to echo the concerns of the Food and Drug Administration's own internal review prior to the drug's formal approval.
Acadia's management team spent a good portion of the conference call outlining their various efforts to educate patients and physicians alike on Nuplazid's clinical profile. Whether this strategy will boost Nuplazid's commercial momentum is anyone's guess, however. The bottom line is that primary caregivers do appear to be concerned about the drug's side effect profile, and it may take some time to change the narrative around this key issue. As such, investors might want to look for more compelling opportunities elsewhere for the moment.